QatarEnergy buys US and other LNG to hedge future Hormuz disruptions
LNG•QatarEnergy is buying long-term LNG supplies from the US and other producers to hedge against future disruptions to exports through the Strait of Hormuz. It signed deals totaling 7 million metric tons per year in the past two weeks and expects more long-term agreements, with a target much higher than 7 mtpa.
1. LNG supply deals
QatarEnergy signed a 20-year agreement to buy 3 million metric tons per year from Woodside's US facilities and two agreements with Cheniere Energy for up to 4 mtpa through 2054. Cheniere deliveries are not expected to begin until 2031. CEO Saad Sherida Al-Kaabi said the company expects to sign more 20- to 25-year supply agreements with US and other producers, with a target “much higher” than 7 mtpa.
2. Hedging Hormuz disruption
The strategy uses QatarEnergy's trading operation and fleet of about 200 LNG tankers to seek revenue if the Strait of Hormuz is closed and gas prices rise. Al-Kaabi said QatarEnergy can seek to profit from the difference between lower US gas prices and higher European prices. The company studied and rejected pipeline options, saying pipelines and related facilities could be targets.
3. Production and repairs
QatarEnergy halted LNG production in early March after Iranian missile attacks and extended force majeure for affected buyers until the end of 2026. Strikes damaged two of its 14 LNG trains, affecting a combined 12.8 mtpa of capacity; repairs are expected to take about three years. Al-Kaabi said Qatar could restart full production within a week of a peace deal if ships were available, while output would remain about 83% of pre-war levels until the damaged trains return.
